Friday Market Wrap: Stock Market Jumps On Employment Numbers

The U.S. stock market posted strong gains on Friday to close out the week in the wake of a better-than-expected nonfarm payrolls number. The Dow and Nasdaq each climbed over 1 percent on the session, while the Nasdaq gained a little less than 1 percent.

Stock gainers included Mercadolibre Inc MELI, up almost 14 percent, and Nu Skin Enterprises, Inc. NUS, which added 12 percent. The positive gains in both stocks were due to strong earnings reports. Shares of Liberty Interactive Group QVCA plunged almost 22 percent on Friday due to disappointing sales growth in its fiscal second quarter. Pharmaceutical giant Bristol-Myers Squibb Co BMY lost 16 percent after a disappointing study involving its Opdivo drug.

Related Link: Markets React Favorably Following Surprisingly Positive Jobs Data

Major Averages

• The Dow Jones Industrial Average climbed 191 points, or 1.04 percent, to finish at 18,544.
• The S&P 500 added almost 19 points, or 0.86 percent, to 2,183.
• The Nasdaq surged 55 points, or 1.06 percent, to 5,221.

Nonfarm Payrolls

Nonfarm payrolls for the month of July were 180,000 compared to consensus estimates of 185,000 and 287,00 in the prior month. Private payrolls, however, beat expectations of 171,000, with 174,000 payroll additions in the month.

Unemployment Rate

The unemployment rate was 4.8 percent for July, which was in line with consensus expectations and down from 4.9 percent in June.

Consumer Credit

Consumer credit contracted in June from an addition of $18.6 billion in May to $17.7 billion. This came in well ahead of expectations of $16.2 billion, however.

Commodities

The commodity complex was mixed on Friday. The Bloomberg Commodity index fell 0.06 percent to 169.28.

NYMEX crude oil futures lost 0.07 percent to $41.90, while Brent contracts were up 0.16 percent to $44.36. Natural gas futures lost 2.65 percent during Friday's trading session to $2.76.

Precious metals traded lower to end the week. COMEX gold futures shed 1.84 percent to $1,342.20. The SPDR Gold Trust (ETF) GLD fell 1.79 percent to finish up at $127.55. Silver contracts lost 3.54 percent to $19.72. The iShares Silver Trust (ETF) SLV fell 3.31 percent to $18.71.

In the grains complex, corn and wheat were both higher to close out the week. Corn contracts added 1 percent to $3.3425 and wheat futures jumped better than 3 percent to $4.1600.

Bonds

Treasury prices were sharply lower on Friday. At the close of equities, the iShares Barclays 20+ Yr Treas.Bond (ETF) TLT had lost 1.04 percent to $138.00.

Treasury yields were as follows on Friday afternoon:

• 2-Year Note: 0.72 percent.
• 5-Year Note: 1.13 percent.
• 10-Year Note: 1.59 percent
• 30-Year Bond: 2.32 percent.

Currencies

The U.S. Dollar was strongly higher on Friday. The PowerShares DB US Dollar Index Bullish ETF UUP, which tracks the performance of the greenback versus a basket of foreign currencies, traded up 0.53 percent to $24.88. The closely watched EUR/USD pair fell 0.38 percent to 1.1088 euros.

Volatility And Volume

The market rally caused a decline in the VIX on Friday, with the closely watched "fear index" losing more than 8 percent to 11.39. The 52-week range in the VIX is 11.18 to 53.29.

Volume was lighter than usual on Friday with around 62 million SPDR S&P 500 ETF Trust SPY trading hands versus a 3-month daily average of just over 95 million shares. Trading in the PowerShares QQQ Trust, Series 1 (ETF) QQQ was also below average with around 19 million shares being traded compared to a three-month daily average of 23.5 million.

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